An insider's guide to the private IPv4 market

Marc Lindsey, Janine Goodman |
May 28, 2015

We've been hearing about the impending depletion of IPv4 addresses for years, but that day is finally upon us -- the free supply of IPv4 numbers in North America will be completely gone within a month or two.

We've been hearing about the impending depletion of IPv4 addresses for years, but that day is finally upon us — the free supply of IPv4 numbers in North America will be completely gone within a month or two.

However, as the world slowly transitions to IPv6, there's no cause for alarm. A significant quantity of unused, previously allocated IPv4 numbers are readily available for re-distribution to IP network operators that need them. And an active private market for IPv4 addresses has emerged to allow companies with these excess IPv4 numbers to sell them to those in need.

These market-based approaches to redistribution of previously allocated IPv4 numbers could provide enough IPv4 addresses to support the Internet's growth for at least five to six more years, based on reasonable growth assumptions.

Why not just move to IPv6

The Internet Engineering Task Force (IETF) launched two initiatives in the early 1990s to confront the free-pool exhaustion problem: It developed a new protocol to replace IPv4 and recommended the formation of a regional Internet registry (RIR) system to allocate IP numbers on a global basis.

IPv6, provides for up to 3.4 x 1038 unique IP addresses, which is easily enough to support the expected growth in the Internet for the foreseeable future. However, incompatibility between IPv4 and IPv6 has hobbled the transition.

The RIR system was designed to track the existing allocations and impose controls on the distribution of IPv4 numbers from the remaining free pool of unallocated IPv4 numbers. There are five RIRs, each exclusively serving a geographic region. The American Registry for Internet Numbers (ARIN) is the largest RIR by the total number of IP addresses in its registry. ARIN's region includes the United States, Canada and most of the Caribbean and North Atlantic islands.

On Jan. 31, 2011, the last of the unallocated IPv4 numbers were handed out by IANA (a department of ICANN) to the five RIRs for distribution to their respective members. To date, three of the five RIRs have nearly depleted their IPv4 inventories. ARIN, with fewer than 3 million numbers remaining, is expected to deplete its IPv4 free pool inventory by mid-July. The African-based RIR has enough supply to serve its region until at least 2019.

Compounding the problem, the need for numbers on a global basis continues to grow rapidly. A report by the Organization for Economic Cooperation and Development found that in 2012 alone, the global market connected nearly 500 million net new devices to the Internet.

As the Internet of Things becomes a reality, that number is expected to hit 50 billion by 2030; each device, from smartphones to washing machines, will have its own globally unique IP address.